At the beginning of 2018, Joey planned to buy a new iPhone, LCD TV, and motorcycle by borrowing money. Joey already owes $25,000 on other loans. He also planned to buy new clothing and DVDs out of current income. An increase in interest rates, during 2018, will most likely
A. cause Joey to decide to borrow more money, but not change what he planned to spend on goods purchased with current income.
B. cause Joey to decide to borrow less money and to spend less on goods purchased with current income.
C. cause Joey to decide to borrow less money, but not change what he planned to spend on goods purchased with current income.
D. cause Joey to decide to borrow more money and to spend more on goods purchased with current income.
Answer: B
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Employees at the university have negotiated a 5 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 4 percent over the next year, which of the following will occur?
A) Unemployment of university employees will fall. B) The decrease in inflation is expected. C) Real wages for university employees will rise. D) Inflation will be 5 percent the following year.
A change in foreign demand does not affect aggregate demand
a. True b. False Indicate whether the statement is true or false
Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted, and both states are deciding whether or not to clean it. If Wisconsin decides to clean the lake, it will cost $1,200 and generate social benefits of $1,500 . However, Wisconsin will receive only $1,100 of those social benefits, while neighbor Illinois will receive the other $400 . If Illinois cleans the lake, it will
cost $700 and generate social benefits of $900 . However, Illinois will receive only $600 of those benefits, while Wisconsin will receive the remaining $300 . If either state does not clean the lake, it experiences a cost of $0 . If Wisconsin does not clean the lake and Illinois does, then _____. a. Wisconsin gains $200 and Illinois gains $100 b. Wisconsin gains $200 and Illinois loses $100 c. Wisconsin gains $300 and Illinois loses $100 d. Wisconsin gains $300 and Illinois gains $100
The downward rigidity of wages as an explanation for the existence of unemployment is known as
A. crashing wages. B. sticky wages. C. locked wages. D. minimum wages.